Author

As many of you will know, ChapmanCG has its
roots in helping Global HR leaders understand the dynamics and challenges of
building HR platforms in emerging markets. It is interesting to see the
parallels from our earlier days recruiting talent into the Asia region with the
more recent need for our expertise in other developing markets. None more so
than Latin America. A region rich with cultural nuances, historical importance
and political and socioeconomic challenges. Its volatility as a region raises
some important questions for HR leaders with regard to future talent investment
and strategic location of teams. The following is an overview of some of the
key trends and topics that merit a pause for thought.

The
Region

What do we mean by Latin America? We look
at the region in its broadest sense to include Mexico and the whole of Central
and South America including many of the Caribbean islands. It is an
exceptionally diverse region centered around a few key countries from a global
business point of view. Main regional hubs are Brazil, Argentina, and Mexico.
Miami/U.S. coming in as a close third or fourth place in terms of Latam hubs.
Chile is becoming more prominent. Colombia is being increasingly recognized for
its stability and robust talent base. Panama is attracting substantial foreign
investment.

Many multinationals still hub Latam out of
the United States, especially Miami, but increasingly Dallas, Houston. In many cases,
this approach—although not ideal from a time zone perspective—offsets ome of
the risk inherent in geopolitical instability, volatility of currencies and
perceptions about personal safety.

Talent
From Within

Such volatility has caused high potentials
to look outside of the region for opportunities. Many HR professionals seek to make
a permanent home in other international markets, often citing improved
education opportunities and safety concerns. Indeed, it is more common now for
talent to move outside of the region than move between countries. Classed as an
expatriate, this move comes at a cost, so whether hiring or offering rotational
programs, these moves are usually restricted for business/commercial leaders.
HR is still view by many as a cost center and support function with little
impact on the top line.

It is certainly not all doom and gloom,
however, as HR leaders from outside of the region are identifying pockets of
promise. While there remains a concern about Brazil as a regional HR hub due to
cost, concerns about corruption, and unfavorable levels of
regulation/governmental control, there has been increased investment in
Colombia and Mexico. This is largely down to two main factors: proximity and
good travel connection to the US and an increasing US commercial influence on
consumption. On the ground in Colombia, the improvement in quality of life and
want for luxury goods is evident.

Enticing
Talent into the Region

Home grown Latin America talent is thriving
overseas. Exposure to global projects, matrix environments, large scale HR
transformations, challenging stakeholders, and best practices have enabled HR
leaders to see what “good HR” looks like. What they can bring back to the
region is a truly global mindset. However, the challenge of how to entice them
back to the region remains. So how do we do that? Compensation and career
development opportunities remain the top two strategies.

The region remains an attractive
proposition for HR leaders who are interested in the expatriate experience, with
people looking at a 2-3-year assignment as a resume builder (and badge of honor).
This can be a great success in the short to medium term and serve as a shot in
the arm for local talent with improved HR processes being introduced and
coaching/mentoring opportunities aiding talent development. However, what
happens when then the expatriate assignment ends and the HR leader leaves the
territory? It is critical to use this ‘time in region’ to ensure good
succession plans and talent development strategies are put in place—strategies
that account for the local culture, passion and enthusiasm and can be combined
with a solid base of HR practices that can be replicated and remodeled, where
necessary.

For expats to achieve success in the
region, it is important to enable them access to business leaders so they can
feel part of the region and make a real difference to business performance.

HR
Specializations

Across the broader HR Generalist space and
CoE constructs, we find some interesting discussion points.

●
HR Operations Although there has
been a steady increase in HRSS and HR Outsourcing across the region, there is
no ‘perfect’ location or set of hubs. Costa Rica has been a popular location in
the past, but its finite talent base means it is unable to keep up with demands
of major multinationals. Brazil is difficult due to regulations and its
language barrier when compared to other Latin America nations. More popular
locations are Argentina and Mexico, followed by Colombia and Panama.

●
HR Generalists & HR Business PartnersThere remains a difference in the DNA
of HR professionals across the region. Brazilian HR leads have strong Union and
Employee Relations/Labor Relations experience whereas HR Generalists in Argentina
have evolved through development areas such as Talent Management, Learning and
Talent Acquisition. Heavy US cultural and commercial influence on Mexico and
Colombia has facilitated a Business Partner-styled HR leader. Chilean HR
professionals tend to be domestic and tactical focused, with country heads of
HR managing small teams. However, this is changing with Chile today being one
of South America's most stable and prosperous nations.

●
Talent Acquisition This is an area
of great opportunity. As a function, it is still focused around process and
less around innovative souring strategies, employer branding and utilizing data
to bring its leaders to the table for broader talent planning discussions.
Thinking tends to be short-term with a lack of sophistication around talent
pipelining. There also remains a heavy reliance on executive search firms as
limited access to social media platforms in many conutries make direct sourcing
and talent identification a significant challenge.

●
Talent Management Another area which
looks ripe for investment, but will continue to face the challenge of an ever-shifting
geopolitical and socioeconomic landscape. Talent Management had been handled as
part of HR Generalist/HRBP responsibility, but more commonly now global talent
and development initiatives are constructed at the corporate CoE and
implemented through country and regional and HR leads.

●
Total Rewards Driven by global
programs, it is rare for multinationals to have a dedicated Regional Head of
Rewards/C&B sitting in the region. It is more common to have the Head of
Rewards in the CoE at the Corporate Headquarters and have a less senior member
of the CoE sit in one of the countries who can work through regional and
country HR leads to implement policies. As
opportunities are limited, it is generally not seen as an attractive area of HR
to step into.

Conclusion

Attraction and retention issues are
expected to become even more challenging as the region recovers from
instability. HR leaders in Latin America have been ‘economic migrants’. As
multinationals have shifted their regional HR head roles and key leaders to
countries that are more stable and better performing economically, it has been
very difficult to develop a robust HR talent base in one location.

Latin America is very similar to Asia 10-15
years ago: the constant change in socioeconomic climate, migration of talent,
talent shortages and the cost considerations of bringing expatriates into the
region What we have seen in Asia is the establishment and recognition of key
regional hubs and the emergence of key players once economic footing has
improved. Latin America will be no different. Where these key hubs will exist
in Latin America is yet to be fully determined. What this means for the HR
leader looking to establish a strategic and effective foothold in the region
and a base for talent to develop and flourish is a need to understand the best
of what each country can offer and not to think a one-size-fits-all approach
will work. It didn’t in Asia and it won’t in Latin America. One thing is for
certain. There is a thirst for knowledge and education across Latin America, a
real desire to be at the table and to be heard. If political, social and
economic stability align, this will enable a platform for talent to develop and
we will have a very powerful global player in the game.

Tags

Many multinationals still hub Latam out of the United States, especially Miami, but increasingly Dallas, Houston. In many cases, this approach—although not ideal from a time zone perspective—offsets ome of the risk inherent in geopolitical instability, volatility of currencies and perceptions about personal safety.

Thought Leadership

We have conversations with hundreds of Human Resources
practitioners across the globe on a weekly basis. So we are in a unique
position to accurately reflect the trends taking place at all levels of the
profession: globally, regionally and locally.

Where possible we also like to
predict future trends and pick up on examples of successes or failures that can
hopefully be used as practical cases for HR practitioners
to monitor.

Because our thought leadership is written by senior members of our
own organisation, it reflects ‘real world’ HR insights and trends – not theory
which can easily be found elsewhere.